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FTSE 100 closes Friday higher and gains on week as investor growth fears ease

The footsie closed up nearly 43 points at 7,228, while FTSE 250 gained almost 208 points at 19,491
Bear and bull
London's blue-chips surrendered many of their gains
  • FTSE 100 closes higher

  • Sterling advances by around a third of a cent against the greenback

  • Wall Street shares also up 

FTSE 100 finished Friday higher and made gains on the week as a whole as markets appeared more confident on global growth prospects.

The footsie closed up nearly 43 points at 7,228, while FTSE 250 gained almost 208 points at 19,491.

Over the week, Footsie gained around 1.7%.

Top riser on the UK premier share exchange was Whitbread (LON:WTB), which added nearly 5% to 5,114p.

Supermarkets were top of the losing pile, with Morrison (LON:MRW) down 1.71%  at 221.15p and Sainsbury (LON:SBRY) off 1.45% to 223.80p.

On Wall Street at the time of writing, the Dow Jones Industrial Average is up 210 points and the S&P 500 and Nasdaq are also up.

3.15pm: Sterling's strength dilutes the Footsie's gains​

The Footsie’s gains were ebbing away as the weekend beckons and sterling made headway on foreign exchange markets.

The FTSE 100 was up 32 points (0.4%) at 7,217, off its best levels as sterling rose 0.3 cents against the dollar to around US$1.3273.

The FTSE 250 – full of companies that are less pleased about a low exchange rate – was making a better fist of holding on to the morning’s gains; it was up 136 points (0.7%) at 19,419.

The company formerly known as Enterprise Inns was doing its bit to bolster the FTSE 250, rising 5% after news of a disposal and a share buyback programme.

The UK’s largest pub company, Ei Group PLC (LON:EIG), is to slash its debt pile and launch a £35mln share buyback after completing the sale of a sUBStantial part of its pub-based portfolio.

It looks like the end of the road, however, for former FTSE 250 constituent, Interserve PLC (LON:IRV), where shareholders have rejected the company’s rescue deal.

The heavily indebted infrastructure company lost a third of what little remains of its value before the shares were suspended after the restructuring plan got the cold shoulder at a general meeting.

The company is now expected to apply for a pre-pack insolvency administration.

1.40pm: Wall Street opens firmer - but not as enthusiastically as expected

London’s index of blue-chip shares traded sideways throughout a lunchtime trading session that saw Wall Street open higher.

The FTSE 100 was up 52 points (0.7%) at 7,238.

On Wall Street, the Dow Jones was 34 points (0.1%) to the good at 25,743 while the broader-based S&P 500 was 10 points (0.4%) firmer at 2,819.

It was not the barnstorming start that had been expected for US stocks, largely because macroeconomic data failed to impress.

Manufacturing activity in New York, as measured by the Empire State index, declined in March, with the reading sliding to 3.7 from 8.8 in February. Pundits had pencilled in a figure of 10 for March.

Meanwhile, US industrial production edged up by 0.1% in February, compared to the 0.4% increase expected by analysts. On the plus side, the January reading was revised to show a decline of 0.4%, versus the 0.6% fall originally reported.

11.00am: FTSE 100 hits high-point for the day

Heading into the last hour of the morning session the index of blue-chip stocks was at its high for the day.

The FTSE 100 was up 57 points (0.8%) at 7,240 as traders gave fretting about Brexit a rest for a while and focused on this afternoon’s US trading, where stocks are expected to put in a final push before the weekend.

“Wall Street may have flat-lined during yesterday’s session, but index futures are once again showing optimism that gains can be picked up before the weekend break,” reported James Hughes at Axi Trader.

“Asian markets put in a solid session, fuelled in part by a timeline on progress over US-China trade talks. There’s still no guarantee that these can be concluded, but at least we’ve seen an indication that the wait will only be another three to four weeks. This has the potential to fuel risk appetite in the interim period, although clearly a quick reversal could ensure if the market doesn’t like the outcome.

“Economic data from the US today includes Industrial Production for February and the preliminary Michigan Sentiment print for March. Although these readings are unlikely to have any direct impact on equities, it’s the story they tell in terms of quantitative tightening that could prove more compelling. A lacklustre consumer sentiment view will again pressure the Fed into suspending QT quickly, in turn giving stocks something worth cheering,” he added.

One blue-chip stock not participating in the broadly firmer advance in the UK was publishing and exhibitions group, Informa PLC (LON:INF), which was down 3p at 730p after Shore Capital abandoned its bullish stance on the stock and hopped on the fence.

In other broker action, Liberum Capital Markets reiterated its ‘hold’ recommendation on boozers operator JD Wetherspoon PLC (LON:JDW).

JD Wetherspoon has had an impressive 1H from a sales perspective with solid LFL [like-for-like] sales growth accelerating post-period end; however, significant cost increases and six further disposals lead to PBT [profit before tax] -18.9% to £50.3mln,” the broker said in an assessment of the publican’s half-year results.

Richard Hunter, the head of markets at interactive investor, commented: “Alongside the usual diatribe against the Brexit process and the tax disparity with supermarkets, Wetherspoons has fallen foul of higher costs, especially with regards to labour.”

“There are positives within the statement, whereby the value for money model continues its popularity,” Hunter conceded.

“Nonetheless, the figures have not been well received. Despite an 18% spike in the share price over the last three months, this cannot mask a drift of 1.4% over the last year, as compared to a 2.7% decline for the wider FTSE250. The wafer-thin margins within the industry are susceptible to any spike in costs, which leaves the pUBS vulnerable from an investment perspective. As such, the general market view of the shares as a sell is unfortunately likely to remain in place for the time being,” he suggested.

Spoons' shares were up 0.6%.
 

9.45am: The Footsie consolidates early gains; FTSE 250 joins the party

The Footsie appears to have established a base camp above 7,200 this morning, buoyed by demand for resource stocks, housebuilders and big pharma.

The FTSE 100 was up 36 points (0.4%) at 7,221 while the mid-cap FTSE 250 was also up 0.4% (82 points), at 19,365, with struggling restaurateur Restaurant Group PLC (LON:RTN) leading the way with an 8% gain.

“It is bizarre to see Restaurant Group flag a decline in profit, cash flow and like-for-like sales as ‘financial highlights’ in its full year results. To the company the figures may not be as bad as some had feared at the start of the year, but to an outsider they are a reminder of how hard the business has been trying to dig itself out of a hole,” declared Russ Mould at AJ Bell.

“Fortunately there are some small signs of encouragement, hence why the share price has raced ahead on the news.

“The future now lies heavily on the success of Wagamama, particularly as Restaurant Group needs to justify the high price paid for the business. Recent trading has been good and there are numerous initiatives underway to drive sales including a ‘grab and go’ takeaway proposition,” Mould noted.

 

 

Gaming software developer Playtech PLC (LON:PTEC) was wanted after it revealed it had bought back 300,000 shares at an average price of 420.67p. The shares currently trade at 429.7p, up 11.3p.

8.30am: The index of blue-chips cruises past 7,200

The FTSE 100 has glided past the 7,200 level, helped by a bit of post-Article 50 vote weakness of sterling on foreign exchange markets.

The pound was trading at around US$1.3240 and had also lost ground to the euro following last night’s parliamentary vote, which was made to the backdrop of Britney’s “Baby, one more time”.

“Though the session is arguably set to be quieter when compared to the rest of the week, the pound is still going to be sensitive to any signs of which way the Brexit winds will be as we head towards the next key date of March 20th,” opined Connor Campbell at Spreadex.

The FTSE 100 was up 28 points at 7,213, helped by decent gains for commodity plays such as Antofagasta PLC (LON:ANTO) – up 1.4% - and Fresnillo plc (LON:FRES) – up 0.5%.

The latter was lifted by an upsurge in the gold price, with the yellow metal rising 0.7% to US$1,303.90 on futures markets after the terrorist attacks today in New Zealand.

Reports indicate that 49 people were killed and more than 20 wounded during Friday prayers at two New Zealand mosques.

Switching to corporate news, housebuilder Berkelely Group Holdings PLC’s (LON:BKG) steady-as-she-goes trading update was enough to propel the shares 0.8% higher.

Proactive news headlines:

Specialist plastics group Symphony Environmental Technologies PLC (LON:SYM) lifted sales over the past year but increased marketing costs affected profits. Group revenues increased by 6.5% to £8.8mln in 2018, driven by a near 200% jump in sales of anti-microbial products to £930,000.

Alba Mineral Resources PLC (LON:ALBA) executive chairman George Frangeskides told investors that the company is pleased with the ongoing performance of the Horse Hill extended production testing programme. UK Oil & Gas PLC (LON:UKOG), the largest Horse Hill stakeholder with 50.635%, this morning provided the market with an update from Horse Hill, highlighting a number of milestones.

OptiBiotix Health PLC’s (LON:OPTI) sUBSidiary, ProBiotix Health, has extended its original supply agreement with German probiotics supplier HLH Biopharma. The new three-year agreement grants HLH an exclusive licence to produce, package and commercialise a capsule containing Opti’s cholesterol-reducing LPLDL strain in Germany.

Amphion Innovations PLC (LON:AMP) has reduced its stake in partner company Motif Bio PLC (LON:MTFB, NASDAQ:MTFB) to 7.88%.

discoverIE Group PLC (LON:DSCV) announced that following six years of service, non-executive directors Henrietta Marsh and Richard Brooman will be retiring from its board at the conclusion of the annual general meeting in July 2019. The group said Bruce Thompson will succeed Brooman as its senior independent director, and added that the recruitment of an additional non-executive director and Audit Committee chair is underway and an announcement will be made in due course.

Regency Mines PLC (LON:RGM) said it has received notice from YA II PN Ltd and Riverfort Global Capital Ltd. of the partial conversion of US$105,705.69 (£80,072) of its outstanding US$1,279,800 (£969,447) loan note originally announced on 6 June 2018 and then refinanced on 14 January 2019. In consequence, the group added, it has issued 97,292,904 new ordinary shares in the company at a price of 0.0823p each.

APQ Global Limited (LON:APQ), the AIM-listed emerging markets growth company, has announced that as at the close of business on 28 February 2019 its unaudited book value per ordinary share was 96.59 US dollar cents, equivalent to 72.62p.

United Oil & Gas PLC (LON:UOG), the independent oil and gas developer, said it will host a shareholder conference call at 12:00pm UK time on 19 March 2019. The call will be hosted by chief executive officer, Brian Larkin and chief operating officer, Jonathan Leather, who will be available to answer shareholders' questions.

6.30am: Leading shares set for mildly positive start after last night's Brexit vote

A mildly positive start was on the cards for London’s blue-chips after the latest Brexit lottery results from parliament last night.

After advancing 26 points yesterday to close at 7,185, the FTSE 100 was expected to knock on the door of 7,200, opening around 12 points higher at 7,197.

“Markets will continue to digest the outcome of yesterday's UK parliament vote on extending Art.50. Unless a deal is reached at the EU summit on 21-22 March, calls by UK politicians for a longer rather than short extension are likely to grow louder,” suggested Danske bank.

“Remember that the EU27 has to grant the extension unanimously, so the response by the EU leaders will be interesting. The EU summit takes place on Thursday-Friday next week,” the bank noted.

Sterling fell back following the latest decision by lawmakers to kick the Brexit can down the road but has stabilised this morning at around US$1.3240.

In the US, news that a proposed meeting in March between presidents Trump and Jinping Xi had been postponed until April sapped investors of enthusiasm. The Dow closed just 7 points higher at 27,710 while the S&P 500 fell a couple of points to 2.808.

Asian markets had a good session this morning with the Nikkei 225 up 164 points at 21,451 after the Bank of Japan left its fiscal policies unchanged. In Hong Kong, the Hang Seng index was 236 points heavier at 29,688.

In corporate news, if you are looking for an escape from all things Brexit, the half-year results statement from JD Wetherspoon PLC (LON:JDW) is probably not the place to look.

The chain’s chairman and founder, Tim Martin, is a rabid Brexiteer and likes to spout off about how being free of the shackles of EU membership will be good for the country.

Possibly he might also find room in the statement to comment on the group’s performance; he’s already warned that pre-tax profits would be “lower than same period last year” as a result of the higher costs.

Brexit is likely to feature in the trading update from Berkeley Group Holdings PLC (LON:BKG) as well, with the housing market evidently feeling the effect of uncertainty over the whole process.

UBS does not expect any major changes to the update provided with December’s interims, with its full-year 2019 pre-tax profit forecast for Berkeley at £730mln, against guidance for £710mln to £730mln, and a net cash estimate of around £850mln.

Restaurant Group PLC (LON:RTN) is in desperate need of some bad news lest the market thinks the massively extensive purchase of Wagamama is some kind of mid-life crisis.

Sentiment has not been helped by the recent shock departure of chief executive Andy McCue – the man in charge of bringing Wagamama under the Restaurant Group umbrella.

Back in January, Restaurant Group said Wagamama had “continued to trade well” over Christmas which helped annual sales to climb 1% versus 2017. Will that up-tick from Wagamama be enough to justify the price tag though?

Significant events expected on Friday:

Trading updates: Berkeley Group PLC (Q3) (LON:BKG), SThree PLC (LON:STHR)

Interims: JD Wetherspoon PLC (LON:JDW)

Finals: Restaurant Group PLC (LON:RTN), Eurocell PLC (LON:ECEL)

Economic data: UK trade in goods data; US industrial production; US manufacturing production; US NY Empire State manufacturing index; University of Michigan US preliminary consumer confidence index

Around the markets:

  • Sterling: US$1.3241, down 0.01 cents
  • 10-year gilt: yielding 1.225%
  • Gold: US$1,301.60 an ounce, up US$6.50
  • Brent crude: US$67.38 a barrel, up 15 cents
  • Bitcoin: US$3,895.09, up US$10.69

City headlines:

  • Financial Times

  • Eurosceptic opposition might be starting to crumble after the prime minister won backing from the House of Commons for her plan to try one more time next week to push her deal through the lower house.
  • Holders of Boeing shares are using derivatives heavily to protect themselves against further steep declines in the share price.
  • Spotify’s boss, Daniel Ek, is seeking to put the blame on Apple’s 30% fee for using the US company’s app store for a possible increase in Spotify’s pricing structure.
  • The Times

  • Martin Sorrell is to receive more than £2 million from WPP’s executive bonus scheme nearly a year after his acrimonious departure.
  • The Treasury postponed the appointment of Dame Jayne-Anne Gadhia to the financial policy committee of the Bank of England in an embarrassing U-turn to avoid “conflicts of interest”.
  • Philip Hammond is in a position to increase spending on unprotected departments this year after banking £30 billion in lower borrowing forecasts in his spring statement, leading think tanks have said.
  • China’s factory output has registered slowest growth on record amid the country’s trade conflict with the US and a slowdown in its economy.
  • The Daily Telegraph

  • Chris Cox, Facebook’s head of product, and Chris Daniels, who ran the WhatsApp messaging service, are quitting as the company seeks to shift its strategy towards private messaging.
  • The Institute for Fiscal Studies has warned that stealth taxes are forcing more people into higher tax brackets and cutting child benefit payments.
  • Love Productions, which is majority-owned by Sky and makes The Great British Bake Off, has enjoyed five-fold increase in profits after it abandoned the BBC to take the hit show to Channel 4.
  • Volatility on global markets this year would hit Savills’ sales this year, the property agent has warned as it unveiled a dip in annual profits.
  • Sky is in discussion with upstart rivals to BT’s network infrastructure arm Openreach in a bid to accelerate the roll-out of ultrafast “full fibre” broadband.
  • Royal Dutch Shell’s chief executive will get more than £17 million for 2018 after doubling his pay packet from the previous year.
  • The Guardian

  • Tesla unveiled a new electric crossover SUV, the Model Y, during an event in Los Angeles on Thursday evening.
  • The Office of Rail and Road has fined Govia Thameslink Railway £5 million for the chaos caused by the introduction of a new timetable last May.
  • Britain has entered into a post-Brexit trade deal with the Pacific islands of Fiji and Papua New Guinea.
  • Daily Mail

  • Aston Martin boss Andy Palmer has been paid £3 million despite luxury car firm's disastrous stock market debut last year.
  • Julian Dunkerton, Superdry co-founder, has slammed the company's management for presiding over a 'catastrophic' plunge in the share price over the past year.

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